Quick Wins to Squeeze the Tax

Squeeze Tax

 

 

With the end of the tax year fast approaching, now is a good point to consider whether you are taking full advantage of any tax relief available. Quick wins are available as follows:

 

 

Marriage Allowance

If one spouse in a married couple is a basic rate taxpayer (earning less than £46,350) and the other spouse does not earn enough to use their personal allowance (currently £11,850), it may be possible to transfer 1/10 of the personal allowance to the higher earning spouse, saving tax of up to £238. Claims can also be backdated for earlier qualifying years.

 

Tax Free Bank Interest 

Up to £1,000 of bank interest is tax free for basic rate taxpayers. This reduces to £500 for 40% taxpayers and nil for 45% taxpayers. For savings generating interest above these amounts, interest can still be paid tax free from ISA accounts, with a maximum investment per year of up to £20,000

 

Capital Gains 

Capital gains tax can arise where profits are made on the sale of some assets (excluding a person’s principal residence), however the first £11,700 of any gain is tax free. Spouses each receive a tax free allowance, and since no capital gains tax arises on transfers between spouses, it may be worth sharing ownership of an asset with a spouse prior to disposal, to take advantage of their allowance.

 

Corporation Tax 

Companies can make contributions to employee pension funds (including for directors) and qualify for tax relief at 19%, whilst no benefit in kind tax arises on the employee.

 

For further advice on tax planning opportunities, please get in contact with your nearest Lentells office.

Chard – 01460 64441, chard@lentells.co.uk

Taunton – 01823 286274, taunton@lentells.co.uk

Seaton – 01297 20584, seaton@lentells.co.uk